05/31/2026
Good Afternoon & Happy Sunday!!
We had a couple of articles sent to me asking questions about rescheduling and how it affects SD patients. Before we start this, we want to add that we appreciate when people point out that information is incorrect or is making patients nervous. However, it puts us in a position to be the people correcting someone who we believe genuinely wants to be helpful, but has no inside information on how the SD program is set up to absorb these changes pretty seamlessly. Which means we are not the most popular after we make corrections.
1. SD DOH runs a very strict inspection and checks/balances on every single operator in the state. Every facility has camera systems that see every single corner in the facility, outside of restrooms and offices. The state also has an independent login to every operator's camera system. This means the state can log in at any time during business hours and watch the staff all day long from every view and every angle. It also means they come into facilities and identify blind spots, and require an on-site angle change or additional cameras to be installed. Every operator has had to add a camera or change an angle as part of an inspection. These requirements exceed the expectations of gaming facilities and pharmacies. These will be very helpful in showing security and diversion planning for the DEA
2. Every company has comprehensive SOPs, Site plans, and management plans. This is an industry standard requirement for licensing in South Dakota. SOPs are required for every license and for every activity performed under that license, including how waste is processed. No stone was left unturned during licensing and renewals.
3. All manufacturers of edibles hold 2 licences from DOH: a Medical Cannabis License and a Department of Health Certified Kitchen/Food Protection License. Staff in the kitchen have ServSafe certifications, and the kitchens are inspected randomly under BOTH licenses. No kitchen was allowed to open before a full inspection, and all requirements were met in accordance with the guidelines for a commercial kitchen. Not a restaurant kitchen inspection, but the other one where you are making commercially prepared food for mass distribution.
4. The industry in SD met monthly for months before we were able to apply for licenses, and GMP was a huge topic as build-outs and retrofits were being planned. They have had GMP standards available for over a decade in cannabis planning, with the someday thought of Rescheduling. Those who couldn't comply have mostly been sorted and have closed up shop because SD is very strict about compliance. Others have merged, sold, or stepped out for many reasons.
5. The only license available to be DEA Certified right now is the Dispensary application Form 224-MMP Link to the portal will be in comments. SD brought in experts who met with operators a few weeks ago, and the process is going smoothly. One of those experts has been the Fractional CFO for many SD businesses for years. Highly experienced and fully ready to move through this process with ease. The qualifications are quite simple: fill out the application, prove you are a licensed business in compliance with state law, submit the same paperwork/SOP/Site Plans/Management Plans/Ownership Information for each owner/investor, up-to-date background checks, and pay the fee. The process is very similar to the yearly renewal done by all operators.
6. SD Cannabis is NOT a cash industry. Yes, on the retail side, you can pay cash, but that cash is deposited at the end of the day in a bank. 2 local banks set up banking for the industry within the first few months. Sorry to burst anyone's bubble that anyone was sitting on a safe of cash, operators are very boring with wire transfers and the good old checkbook when buying wholesale.
7. The biggest window for change will be in manufacturing, extraction, and cultivation. Those applications are not open yet for a big reason: there is a DEA Hearing that runs from the end of June into July to discuss those changes with Industry Experts. Business owners, Attorneys, Scientists, long-time advocates, and public policy workers are where the conversation is centered for participation. The DEA has received hundreds of thousands of public comments, legal letters, and decks from all over the country, and there is a potential for multiple legal challenges based on the rulings from that hearing. These legal challenges will delay any proposed ruling by injunction of implementation. We also have heard that each of these licenses will open at different times to allow the operators to fill out and file their complete applications for each license.
8. We are lucky in SD to have the DOH hold stakeholder meetings with all operators to discuss rule changes and fee increases. A stakeholder meeting is a private, usually all-day meeting that goes line by line on changes with licensed operators. I want to make that clear, there are 2 meetings a year for those who have a stake in ensuring access is never delayed. 1. MMOC, this is for the patients and the public, and we encourage everyone to take part in that meeting. You can watch from home, and it's where the patients' voices really are the main event. 2. Industry Stakeholder is State and Operators only. These meetings give everyone a head start to prepare for these changes and to be part of the fee structure.
9. Everyone in SD Cannabis has been preparing for these changes for a long time before their doors ever opened. There are several manufacturing companies and verticals that have built out GMP Facilities when they did their initial buildouts. The transition should be smooth for everyone in the state.
The reality is that 34-20G was the most comprehensive cannabis bill in the history of the country, and the SD Administrative Rules added layers of additional requirements that all operators have to follow and meet; otherwise, they risk the nonissuance of their initial license, loss of their licensing, or heavy fines. This has made them all experts in their fields and allowed them to hire/onboard trained in-house experts for each license to work with the facility-wide Compliance Officers.
The other great thing is that all businesses have some relationship and have 0 issue reaching out to those who know more and sharing information to ensure nobody is left behind. The competitive edge has worn down, and many operators sell each other's flowers and products in their dispensaries, creating a full circle ecosystem that allows affordable and quality access for all. This is why knowing how to read the licensing numbers is important to know where your flower comes from. It's listed on every package and shows how close these business relationships are for this community who put aside all personal differences to go all in for patients.
I am sorry that we don't update Patients regularly on this topic, and if you want us to, please let us know. Our focus has always been on patient access and education, but business discussions never felt like they belonged here. If we are wrong, please let us know, and if you have questions about the inner workings, inspections, and basic knowledge of how SD treats operators, ask them. We will answer if we can, and if we can't, we will find someone who can.
Enjoy the rest of your weekend!
NASD STAFF
